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BUSINESS FOUNDATIONS · LESSON 01
Revenue is not profit.
Revenue is the amount earned from sales. Profit is what remains after the relevant costs are deducted. A growing business can increase sales while still losing money if its costs grow faster.
Example: a workshop sells 100 seats at ₹500 each.Revenue = 100 × ₹500 = ₹50,000If total costs are ₹35,000:Profit = ₹50,000 − ₹35,000 = ₹15,000
Before comparing two businesses, check that you are comparing the same measure and period. Revenue, gross profit and net profit answer different questions.
Put your results in perspective.
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